Tax Burden, Exchange Rate, Foreign Ownership, Profitability, and Transfer Pricing in Indonesian Mining Companies

Abstract

This study examines the associations of tax burden, exchange rate exposure, foreign ownership, and profitability with transfer pricing practices among mining companies listed on the Indonesia Stock Exchange (IDX) during 2020–2024. Using secondary data from annual reports, purposive sampling selected nine of 58 companies, yielding 45 firm-year observations and 37 after outlier treatment. Transfer pricing was proxied by Related-Party Receivables (RPT), explanatory variables were Effective Tax Rate (ETR), foreign exchange gains or losses relative to pretax profit or loss, foreign shareholding, and Return on Assets (ROA). Descriptive statistics, assumption tests, and multiple linear regression were performed using SPSS 24. Exchange rate exposure showed a significant positive association with RPT (β = 5.207, p = 0.010), supporting H2. Tax burden (β = −0.088, p = 0.885), foreign ownership (β = 0.103, p = 0.552), and profitability (β = −0.942, p = 0.069) were insignificant. The overall model was significant (F = 3.199, p = 0.026), with adjusted R² = 0.196. Exchange rate exposure was the only individually significant predictor of the transfer pricing proxy, without establishing causality or aggressive pricing behavior. The analysis covers nine companies, a five-year period, and 37 observations; the model explains 19.6% of RPT variation. The findings extend Indonesian tax accounting evidence and inform management, investors, and tax authorities assessing related-party transactions, while highlighting the importance of careful proxy interpretation.

Keywords

Exchange Rate Foreign Ownership Mining Companies Profitability Tax Burden Transfer Pricing